This paper aims to study the stability issue in a Cournot duopoly with codetermined firms. We show that when both firms codetermine employment together with decentralised employees' representatives, a rise in wages acts as an economic (de)stabiliser when the wage is fairly (high) low, while under profit maximisation a rise in wages always acts as a stabilising device because the parametric stability region monotonically increases with the wage in such a case. Moreover, a rise in the union's bargaining power has a de-stabilising effect, except when the wage is low and the firm power is already high. Therefore, under codetermination a change either in the wage or firm power in the Nash bargaining plays an ambiguous role on stability. We also show with numerical simulations that complex dynamics can also occur.
|Autori:||Fanti L; Gori L|
|Titolo:||The codetermined firm in a Cournot duopoly: a stability analysis.|
|Anno del prodotto:||2012|
|Digital Object Identifier (DOI):||10.1016/j.econmod.2012.04.015|
|Appare nelle tipologie:||1.1 Articolo in rivista|